While there may be improvements in the number of women in top business roles, much more needs to be done to close the gap among lead audit partners, argues executive coach Geraldine Gallacher.
A key learning point from the first gender pay gap audit is that employers need to get more women on boards and into senior roles if they are to close the gap. While this insight provides employers with a useful starting point, more needs to be done to better understand why significantly more top jobs are awarded to men rather than women.
If we think about this problem specifically in relation to audit, we know that very few women hold the top roles. To be more precise, new research from the US CFA found that only 15% of Standard & Poor’s 500 indexed companies and 11% of S&P 100 companies have a female lead engagement partner.
What I find particularly fascinating about this research is the big reveal that none of the S&P 100 companies with audit relationships longer than 75 years have female lead engagement partners. This figure rises to three for companies with an audit relationship exceeding 40 years old.
Rotation rules in the UK have for some time provided firms with ample opportunity to review gender imbalance among lead engagement partners on a five-year cycle. Yet redress is painfully slow.
It’s hard to work out what’s going on in the lead engagement partner appointment process that results in more men getting the role than women. Often the process involves quietly sounding out potential candidates and asking for recommendations from within the partner network, the majority of whom are male.
At a recent forum, city employers were discussing how to put a rocket up the ambition of getting more women on corporate boards. One suggestion that I think the Big Four might consider is to make the appointment process more transparent. Break down the process for appointing a lead engagement partner and analyse at each step when and most importantly why a decision was taken to appoint a man over a woman candidate.
Inevitably the answer to more women making lead engagement partner will involve multiple solutions, some of which will need to start early on in their career. But only when employers open the black box of the appointment process will they have the evidence to create solutions that target the problem with precision.
McKinsey research shows that gender balanced boards make less risky and better commercial decisions. With the CMA probing audit quality, the time is ripe for employers to review how gender balance can improve audit outcomes.
Geraldine Gallacher is founder and MD of the Executive Coaching Consultancy.
Article available at:https://www.icaew.com/en/groups-and-networks/local-groups-and-societies/london-ds/london-accountant/career-and-development/nov18-gallacher